According to Gizmodo, the Department of Justice just reached a settlement with RealPage that limits how the company’s controversial rent-setting software operates. RealPage, founded in 1998, provides YieldStar and AI Revenue Management systems used by landlords across the country. The DOJ’s antitrust lawsuit alleged RealPage was illegally coordinating price increases by pooling nonpublic data from competing landlords who collectively controlled about 80% of the market in some areas. Under the settlement, RealPage can no longer mix data from different landlords or use current lease information to train its algorithms. The company still denies any wrongdoing, with attorney Stephen Weissman claiming there’s been “a great deal of misinformation” about how their software works. If approved by a North Carolina judge, this represents the government’s first major enforcement action against algorithmic price-fixing in the rental market.
How the Rent Machine Worked
Here’s the thing about RealPage‘s system – it was basically a legal-looking workaround for what would otherwise be illegal price-fixing. Landlords would feed the software all their private data: current rent amounts, lease renewal rates, vacant units, even application details. RealPage would then combine this information from supposedly competing landlords in the same area and run it through their algorithm. The system would spit out “recommended” prices that everyone should charge. A 2022 ProPublica investigation found landlords were thrilled with the results – one revenue manager said the beauty of YieldStar was that “it pushes you to go places that you wouldn’t have gone if you weren’t using it.” In Nashville, prices jumped 14.5% after widespread adoption. So instead of competing against each other, landlords were effectively working together through the software to push rents higher.
Not Just About Rent Prices
And get this – the rent-setting was only part of the problem. RealPage’s suite of landlord tools has been described as an “unseen poltergeist” making renters’ lives more miserable for years. A 2020 investigation by The Markup and New York Times found the company was using flawed algorithms to perform background checks, leading to people being denied housing based on nonexistent criminal charges. Think about that – your ability to find a home could be torpedoed by buggy software you’ve never even heard of. The company’s own marketing materials boasted that landlords using their system were “driving every possible opportunity to increase price even in the most downward trending or unexpected conditions.” They weren’t exactly hiding their intentions.
Why This Settlement Matters
So is this a win for tenants? Well, yes and no. The settlement does force RealPage to change its most problematic practices – no more data pooling from competitors, no more using current lease info for training. That should weaken the platform’s ability to coordinate industry-wide rent increases. But critics point out that RealPage itself isn’t being dismantled, and the settlement doesn’t include any admission of wrongdoing. Gail Slater from the DOJ’s antitrust division said this sends a message that “competing companies must make independent pricing decisions” even with AI tools. The timing is interesting too – this comes as California separately settled with landlords over rent gouging allegations. Basically, we’re seeing the first real regulatory pushback against algorithmic price coordination, and it’s happening in one of the most essential markets: housing.
The Bigger Picture
Look, this settlement represents a watershed moment in how we regulate algorithms that directly impact people’s lives and wallets. The DOJ is making it clear that you can’t hide anticompetitive behavior behind complex software. As the official DOJ statement puts it, they’ll “remain at the forefront of vigorous antitrust enforcement” as algorithmic tools become more common. But here’s what worries me: RealPage built this system over decades, and it took years of investigative journalism and legal action to rein it in. How many other industries have similar hidden coordination happening right now? The rental market was just the most visible target because housing costs are so painfully obvious to everyone. This settlement might be the opening shot in a much larger battle over how we govern the algorithms that increasingly control access to essential goods and services.
